(Bloomberg) -- Britain’s new Labour government will meet pensions industry bosses on Monday in an effort to boost economic growth and deliver better returns on savings.
The chief executive officers of Legal & General Group Plc, Aviva Plc, M&G Plc and Phoenix Group Plc will be among representatives from the City of London discussing the sector’s future with Chancellor of the Exchequer Rachel Reeves.
Labour came to power earlier this month promising to make the UK the fastest-growing Group of Seven economy, and Reeves sees pensions reform as a key part of her plans. The Treasury said on Saturday it was launching a review of the industry with the aim of driving investment into parts of the domestic economy that deliver growth and in turn boost the size of people’s pensions.
Reeves called the review “the latest in a big bang of reforms to unlock growth.”
The review will be led by Reeves and Emma Reynolds, the new pensions minister who was head of policy at TheCityUK — a lobby group for the financial sector — until she won a parliamentary seat in the July 4 election.
The review will consider the benefits of consolidating UK pension funds, according to the Treasury’s statement. It said the £360 billion ($465 billion) Local Government Pension Scheme in England and Wales is split across 87 funds and has seen its fees jump 70% since 2017 to around £2 billion a year.
Pension reform was outlined as part of Prime Minister Keir Starmer’s legislative agenda during the King’s Speech on July 17. The Pension Schemes Bill seeks to bring smaller pension pots together, and put measures in place to tackle underperformance.
Jeremy Hunt, Chancellor under the previous Conservative administration, outlined a number of ideas to reform the sector at a speech in Mansion House a year ago. At the time, Hunt convinced several large pension providers to invest more in unlisted UK companies in an attempt to fuel growth, and in his March budget of this year he said the government would intervene if defined-contribution funds did not put more money into domestic firms.
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